DURGADEVI PHUSPALATHA,BANGALORE vs. INCOME TAX OFFICER, WARD-5(1)(1), BANGALORE

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ITA 2126/BANG/2025Status: DisposedITAT Bangalore12 June 2026AY 2019-20205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the Assessing Officer for de novo adjudication, granting the assessee another opportunity to file supporting documents. The Tribunal emphasized that no order should be passed without affording a proper opportunity of hearing.

What were the facts?

The assessee's appeal against the CIT(A)'s order was dismissed for non-compliance. The Assessing Officer had made an addition of Rs. 1 crore on account of unexplained time deposits during reassessment proceedings.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without a personal hearing and whether the reassessment proceedings and addition under Section 69A were valid.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 142(1),Section 144,Section 144B,Section 69A,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

PERSANDEEP SINGH KARHAIL, JUDICIAL MEMBER 1. The assessee has filed the present appeal against the impugned order dated 05.08.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”] for the assessment year 2019-20.

2.

In this appeal, the assessee has raised following grounds: - 1. The order of Honourable Commissioner of Income Tax (Appeals), NFAC (hereinafter referred as “CIT(A)” for brevity) to the extent prejudicial to the Appellant is bad in law.

2.

The CIT(A) has erred in dismissing the appeal without providing an opportunity of personal hearing to the Appellant. The same is against the principles of natural justice.

3.

The CIT(A) has erred in dismissing the appeal without appreciating the following:

a) The Appellant is a Senior citizen and a widow. The details related to the income were all maintained by her spouse late Mr.Kamalakar; b) Since, the Appellant does not have any knowledge about financial and tax matters, it was difficult to collate the necessary details. The Appellant is also suffering from depression and anxiety since 10 years; c) Further, due to merger of public sector banks it is difficult to collate the necessary details. 4. The CIT(A) has erred in confirming the order of the AO without appreciating that;

a) The Reassessment Order passed u/s 147 is bad in law and invalid as order under Section 148A(d) as well as the Notice under Section 148 of the Act have been issued by jurisdictional Assessing Officer rather than in faceless manner as envisaged under Section 144B as also under Section 151A of the Act. b) The AO has initiated reassessment proceedings u/s 147 of the Act without any information that suggests that income has escaped assessment. The reassessment proceedings have been initiated based on presumption, surmises and conjectures without there being any information that income has escaped assessment in the case of Appellant. 5. The CIT(A) has erred in not confirming the action of the AO in treating time deposits as unexplained money u/s 69A of the Act without appreciating that;

a) Section 69A is not applicable to the facts and circumstances of the case; b) Time Deposits were made in earlier years and were renewed during the current year upon maturity; c) Time deposits alleged to be as unexplained money are result of earnings and savings of earlier years which is already subjected to tax. 6. The learned AO has erred in levying interest under section 234A and 234B of the Act of Rs.31,97,672/- and Rs. 46,01,528/- respectively. On Page 2 of 5 the facts and circumstances of the case, interest under section 234A and 234B is not leviable, being consequential in nature. The Appellant denies its liability to pray interest under section 234A and 234B of the Act. 3. We have considered the submissions of both sides and perused the materials available on record. The brief facts of the case are that the assessee is an individual and on the basis of the information flagged on the INSIGHT Portal on the Income Tax Department, proceedings under section 147 and section 148A of the Act were initiated and notice under section 148 of the Act was issued on 30.03.2023. In response to the said notice, the assessee filed its return of income on 27.04.2023, declaring a total income of Rs. 7,24,290/-. During the reassessment proceedings, the assessee was asked to furnish details/documents/information regarding its sources of income and the sources of time deposits and interest income earned during the year. However, despite the issuance of multiple statutory notices under section 142(1) of the Act, the assessee failed to provide any details as sought. Accordingly, the Assessing Officer (“AO”) proceeded to conclude the assessment on a best judgment basis and vide order dated 29.02.2024 passed under section 147 r.w.s 144 r.w.s 144B of the Act made an addition of Rs. 1 crore being the total time deposit made by the assessee during the year, by considering the same as unexplained money under section 69A of the Act.

4.

In the appellate proceedings before the learned CIT(Appeals), despite the grant of multiple opportunities, the assessee failed to comply with the hearing notices and did not bring any material/evidence in support of its case, contrary to the findings of the AO. Accordingly, the learned CIT(A) upheld the additions made by the AO and dismissed the appeals filed by the assessee. Being aggrieved, the assessee is in appeal before us.

5.

Having considered the submissions and perused the materials available on record, we deem it appropriate to grant another opportunity to the assessee to file all the details in support of its claim for necessary verification. Accordingly, we restore the matter to the file of the jurisdictional AO for de novo adjudication after taking into consideration the details/documents as may be filed by the assessee. We direct the assessee to fully cooperate in the assessment proceedings and furnish any other information/documents as may be sought by the AO for complete adjudication of the issue involved. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the assessee. With the above directions, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes. Before concluding, we may also note that, since the matter has been restored to the file of the AO for consideration afresh, all the contentions of the assessee remain open.

6.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on 12th June, 2026

Sd/- Sd/- (PRASHANT MAHARISHI) (SANDEEP SINGH KARHAIL) VICE PRESIDENT JUDICIAL MEMBER Bangalore, Dated, the 12th June, 2026. *VM* Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A)

By order Assistant Registrar, ITAT,Bangalore

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